Correlation Between Papaya Growth and Foremost Lithium

Can any of the company-specific risk be diversified away by investing in both Papaya Growth and Foremost Lithium at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Papaya Growth and Foremost Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Papaya Growth Opportunity and Foremost Lithium Resource, you can compare the effects of market volatilities on Papaya Growth and Foremost Lithium and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Papaya Growth with a short position of Foremost Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Papaya Growth and Foremost Lithium.

Diversification Opportunities for Papaya Growth and Foremost Lithium

0.0

Correlation Coefficient

Papaya Growth  Foremost Lithium

Pay attention - limited upside

The 3 months correlation between Papaya and Foremost is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Papaya Growth Opportunity and Foremost Lithium Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foremost Lithium Resource and Papaya Growth is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Papaya Growth Opportunity are associated (or correlated) with Foremost Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foremost Lithium Resource has no effect on the direction of Papaya Growth i.e., Papaya Growth and Foremost Lithium go up and down completely randomly.

Pair Corralation between Papaya Growth and Foremost Lithium

If you would invest (100.00) in Papaya Growth Opportunity on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Papaya Growth Opportunity or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Papaya Growth Opportunity  vs.  Foremost Lithium Resource

Papaya Growth Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Papaya Growth Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Papaya Growth is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Foremost Lithium Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foremost Lithium Resource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Papaya Growth and Foremost Lithium

The main advantage of trading using opposite Papaya Growth and Foremost Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Papaya Growth position performs unexpectedly, Foremost Lithium can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Foremost Lithium will offset losses from the drop in Foremost Lithium's long position.

The idea behind Papaya Growth Opportunity and Foremost Lithium Resource pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.